Before The Bell
The U.S. stock market managed to make some progress yesterday, helped by a solid showing on the NASDAQ. Investor sentiment seems positive, as the third-quarter earnings season is now starting to unfold. Overnight, the international markets have been moving higher. In Asia, the Nikkei logged a respectable advance. In Europe, the FTSE 100 has also been making progress. Meanwhile, on our shores, the S&P futures are ahead roughly 20 points, which points to a constructive start to the trading day.
In economic news, the housing market returns to the spotlight this week. Today, we get a look at housing starts for the month of September. The monthly building permits, which tend be a forward looking indicator, will be released, as well. On Thursday, the latest existing home sales numbers will follow, and that report should receive some attention. We think investors will review these issuances carefully, as concerns about supply chain disruptions and labor shortages have surfaced across the housing sector. Specifically, these challenges have been mentioned by some of the nation’s leading home builders in their recent corporate reports. Further, investors may be concerned that ongoing inflationary pressures could put a damper on the real estate markets and deter new buyers.
In the corporate arena, the third-quarter earnings season is now in progress. Last week, we heard from a number of large banks and financial institutions. It can be quite helpful to review the results of the financial companies, as these businesses can serve as barometers for the broader economy. Today, we will hear from many more large names, and these reports should prove instructive, as well. In the broader healthcare area, Johnson & Johnson (JNJ) delivered its results this morning. In the communications and entertainment space, Netflix (NFLX) is slated to post its numbers after the market closes.
Technically, the stock market has started to firm up, after pulling back in early September. Over the past few days, the S&P 500 Index has managed to move back above its 50-day moving average, located around the 4,440 mark. This is a key level closely watched by technicians and traders, and it will be critical for the bulls to maintain the market’s recent gains. The third-quarter earnings season has gotten off to an encouraging start, and most companies are faring well, despite the challenging climate. The positive news could serve as a catalyst to lift stocks.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
